Despite the US imposing higher-than-expected tariffs on India, textile stocks surged on April 3, with Vardhman Textiles gaining 18% and other industry players rising between 1% and 10%.

Why Are Indian Textile Stocks Rising?

1. Bangladesh, Vietnam, and China Face Steeper US Tariffs

• Bangladesh's apparel exports—80% of its total exports—face a 37% tariff.

• Vietnam's textiles will now be hit with a 46% tariff.

• China, the largest textile exporter to the US, faces a massive 54% duty.

These tariffs make Indian textile exports more competitive in the US market, as India faces a lower 26% duty.

2. US Buyers Expected to Shift Sourcing to India

Industry experts believe that with Bangladesh and Vietnam facing higher tariffs, US retailers may increase orders from India.

"Higher tariffs on textiles and apparel create an opportunity for India to gain a competitive edge in the US market," noted domestic brokerage Prabhudas Lilladher in a report.

3. India’s Government is Supporting Textile Growth

The Indian government is investing in the textile sector to:

• Improve cotton farming productivity with a five-year mission announced in the Union Budget 2025–26.

• Implement the 5F vision (Farm to Fiber to Factory to Fashion to Foreign) to strengthen the textile ecosystem.

This long-term support enhances India’s ability to meet rising demand from global buyers.

Top Gaining Textile Stocks

The stock market reacted positively, with textile stocks seeing significant gains:

• Vardhman Textiles: +18% (₹475 per share)

• Ambika Cotton Mills: +10%

• KPR Mills: +9%

• Welspun Living: +8%

• S.P. Apparels: +7%

• Nitin Spinners: +6%

• Arvind: +5%

• Himatsingka Seide: +4%

How Global Trade Uncertainty is Affecting Markets

1. Trump’s Global Tariff Strategy Hits Markets

Trump’s administration has imposed tariffs ranging from 10% to 49% on over 180 countries, leading to:

• Heavy losses in major Asian stock indices, including CSI 300, Hang Seng, and Nikkei 225.

• A broad-based selloff in emerging markets, as investors reassess risks.

2. Indian Stock Market Shows Resilience

• Despite initial losses, Indian indices recovered.

• Pharma stocks rallied as Trump excluded pharmaceuticals from the new tariffs.

• The broader market stabilized, with a focus on domestic demand-driven sectors like textiles.

What’s Next for India’s Textile Industry?

• If the government cuts cotton import duties to 0%, Indian exporters could gain further ground.

• Trade negotiations may influence long-term demand shifts, potentially boosting India’s exports.

• Global buyers diversifying sourcing strategies are increasingly looking to India for stable, competitive textile supplies.

Conclusion

Trump’s new tariff policy has reshaped the global textile trade, with India emerging as a key beneficiary. As Bangladesh, Vietnam, and China struggle with higher tariffs, Indian textile stocks are gaining momentum. With government support and increasing global interest, the sector is well-positioned for long-term growth.

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